The Code Committee has proposed three changes to the Code of Professional Conduct for Financial Advice Services. These are outlined in the consultation paper relating to competence, knowledge, and skill. Strategi encourages all those impacted by the code to read the consultation paper.

What is proposed?

The Committee proposes three amendments to the Code to:

1. Recognise Version 3 of the Level 5 certificate. Those who already meet existing requirements do not need to update their qualification.
   
   
2. Retain the Level 5 certificate qualification outcomes as the minimum standard of particular competence, knowledge, and skill for designing an investment plan, and remove the interim status of Code Standard 7.
   
   
3. Clarify the requirements for continuing professional development in Code Standard 9, including the adoption of a more principles-based standard, and supplementing the commentary.
   
   

Benefits of the proposed changes for advisers and the industry

Strategi believes these three proposed changes are sensible, reflect current reality and remove uncertainty about the future.

Here’s a summary of Strategi’s thoughts:

• Hard work of FAPs: Most FAPs work hard to provide good advice to clients.
  
  
• Level 5 qualification: The Level 5 qualification has been a good practical minimum standard. Moving to a higher qualification wouldn’t necessarily improve the quality of advice and might deter new entrants to the industry. It could also unnecessarily frustrate existing advisers who may have to attain the higher qualification.
  
  
• Version 3 of the Level 5 qualification: This version reflects the changing needs of consumers and how FAPs may provide regulated financial advice. The shift to skill standards instead of the old unit standards in the qualification allows education providers more flexibility in delivery. This helps new entrants quickly achieve the competence demonstrated by experienced advisers.
  
  
• Emphasis on soft skills: Version 3 places greater emphasis on ‘soft skills’ which often add the most value to clients. Existing advisers have already obtained these skills through training and experience.
  
  
• CPD clarification: Greater clarification around continuing professional development (CPD) allows more flexibility in what is regarded as CPD. The Code Committee supports the idea that CPD should broadly develop, not just maintain, the competence, knowledge, and skill of all financial advisers. The Financial Advice Continuing Professional Development 2024 handbook reflects these proposed changes.

If you have any questions or need more information, feel free to reach out to us.